Wednesday, July 10, 2013

“Poverty as a Weapon of Mass Destruction”

“Poverty as a Weapon of Mass Destruction”by Christina Sarich

"80% of the entire world population lives on less than $10 a day. Even if you live in a country where a gallon of gasoline doesn’t cost around $3.50, and a McDonald’s ‘Happy’ Meal – one of the worst and most nutritionally deficient, but arguably, cheapest meals around – costs about $5, that leaves you $2 and some change to eat another meal, pay rent and medical expenses, or perhaps buy your seven year old a birthday present. That small amount of money might leave your pockets feeling a little empty – in truth it’s the recipe for poverty, and it hasn’t happened by accident. To the majority of people in the world, it was planned and executed with steely perfection by the 2% at the top of the corporate food chain.

Some top-down economists will blame the poor in the US, as if they are a class of their own, for being lazy, or that the single moms are to blame for having so many children out of wedlock that they have to apply for help from the state, draining tax payer funds. Still others will say that world populations are just used to being ‘working-class’ and aren’t intelligent enough to garner jobs which pay higher wages. You would think that with the invention of the Internet, someone in Bangladesh or Laos would be able to make what a middle manager in the US earns, as long as they had similar skills. This simply is not the case.

“Behind the increasing interconnectedness promised by globalization are global decisions, policies and practices. These are typically influenced, driven, or formulated by the rich and powerful. These can be leaders of rich countries or other global actors, such as multinational corporations, institutions, and influential people.

This doesn’t even take into consideration the cost of wars, which are waged over illusory issues to control natural resources, and the poverty that ensues in countries that are damaged by war’s effects.

Global poverty is highlighted in our own country and explained well in the Senate-issued Levin–Coburn Report. It states that: “The ’07/’08 [financial] crisis [which we are still recovering from] was not a natural disaster, but the result of high risk, complex financial products; undisclosed conflicts of interest; and the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street.”

In 2007, more than 91% of AAA-rated mortgage securities were down-graded to junk status. This means an investment that was once thought to be right as rain was now as sound as a drunken night in Vegas at the roulette tables. This security went from AAA to –Z overnight. The sad truth is that the market makers knew they were ‘junk’ investments all along. Levin says, “Looking back, if any single event can be identified as the immediate trigger of the 2007 financial crisis, it would be the mass downgrades... those downgrades hit the market like a hammer, making it clear that [they] had been a colossal mistake.” Credit raters and banks knew all along those investments would tank. An interesting study from Stanford University on a Sovereign (National) Fiscal Responsibility Index collaborates Levin’s assertions, saying banks and brokers are “deliberately misrepresented by the players.”

The Stanford study compared 34 nations that belong to the Organization of Economic Co-operation and Development (OECD) and the so-called ‘BRIC’ nations – the emerging financial powers of Brazil, Russia, India and China. Fiscal responsibility was measured in the study by various factors including revenue rules (tax law), international and national debt, and so forth. All 34 nations, as well as the BRIC nations, were shown to participate in the methodical stripping away of a middle class and the wide-spread creation of poverty.

What is even more disheartening is that the more a person struggles with poverty, the more they are often marginalized from society and given little voice or representation in larger political debates and the law-making that affect their state of wealth. This can make the ‘American dream’ the impossible hog-wash for many and, as far as international poverty standards are concerned, extraordinarily difficult to rise above the mayhem on less than $2 a day.

In the US, the more poor there are, the easier it is for lawmakers to pass bills that promote corporate greed and million dollar bonuses, while ignoring gross negligence when it comes to fiscal responsibility. The same is true in other nations. If a CEO gets paid an average of $7000 an hour, or 350 times his or her workers, it could be said that those running our corporations are more like slave owners than fair, contributing members of society. For example, the CEO of Google, Eric Schmidt has a total annual compensation of just under $101 million, which breaks down to about $48,548 per hour, or about $809 per minute.

It isn’t laziness that has caused worldwide poverty, it is the disenfranchisement of millions through the perpetuation of corporate greed. Even the mega-corporation of Ben & Jerry’s, makers of the popular ice cream, once had a 5 to 1 board member ruling that the CEO would be limited to a 5 to 1 ratio of earnings over his lowest paid worker, but the company ditched this practice when they couldn’t find anyone to replace Ben Cohen, the CEO that worked for just $81,000 a year. At $2 a day, that’s still $80,270 more than billions of people earn every year, and only the poor die young.

“People who are lower on the socioeconomic ladder (indicated by their level of education, occupation, or income) have shorter and less healthy lives, on average, than those on higher rungs. Indeed, life expectancy at birth often varies by 5-10 years, depending on social and economic well-being, with poorer people spending 10-20 more years of life suffering from illness or disability than their wealthier counterparts.” (Project Syndicate)

1 comment:

A Revolutionary Act...

Government truth? LOL

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